How the New Age of Austerity Impacts Your Use of Hotels
You’ll probably make fewer, shorter and cheaper business trips this year and opt for basic efficiency and good service from the hotels you do stay in, according to a report by travel technology company Amadeus for the Economist Intelligence Unit.
Increased scrutiny of how business—any business, not just those using TARP
money—spends money means companies want to make business trips as productive as possible.
Gyms and restaurants count for little. Fast internet access is the most important amenity; efficient check-in is also key. The report predicts a “flight to trusted brands” and expectations of a certain level of good service no matter where you are in the world. (Source: Amadeus press release).
Hotels Make Loyalty Programs More Attractive
Hotel companies are enhancing their loyalty programs. Hilton HHonors has launched a new premium credit card, the Hilton HHonors Surpass Card from America Express, and enhanced the existing Hilton HHonors Card. Both cards let you earn points fast and offer generous awards.
The new Surpass card awards 9 points for every eligible $1 spent at Hilton Family hotels; complimentary standard membership in Priority Pass, which gives card members access to more than 500 airport lounges worldwide; and the ability to earn Hilton HHonors’ Diamond VIP status with an annual spend of $40,000, Hilton HHonors Card enhancements include upping bonus points (6 up from 5) for spending in an expanded list of double point categories, and special perks such as discounted and upgraded chauffeured car service.
Carlson Hotels Worldwide is offering its guests “3 for 3” – an additional 3,000 bonus Gold Points for members of its goldpoints plus loyalty program who stay three nights at any global Carlson Hotels from now through April 30. (Source: Hilton, Carlson press releases).
PKF Forecasts Declining Room Rates
Drawing on data that it’s collected since 1937, PKF Hospitality Research says that the U.S. has experienced 11 economic recessions since 1937; they lasted anywhere from six to 16 months. Some of the results were obvious, but there were some surprises, too.
As expected, during nine of the 11 downturns, occupancies fell, but that did not automatically mean average daily rates (ADR) fell. In fact, in eight of 11 recessions, they increased. For example, in the 1973-75 and 1980-82 recession, caused mainly by inflation, rates increased and hotels still were able to make some minor profit gains.
This time around, however,
- PKF expects ADRs to fall. PKR forecasts that lodging demand will decline a cumulative 4.2 percent from 2007 through 2009
- That, coupled with a 5.6 percent increase in supply, will produce 9.1 percent decline in occupancy to 57.2 percent,
- The result: a 4.6 percent drop in ADR, continuing the discounting that began in the fourth quarter of 2008. Source: PKF press release